A look at the exporters' price lists indicates that the situation is currently easing for buyers. However, exporters are facing a season with major challenges, even if these are not yet visible.

A Promising Start to the Season

In principle, the season got off to a promising start. Although TMO's bid was high, it was still in line with expectations. A price has formed on the free market that is below the TMO's bid, meaning that the free market can work well with it. The exchange rate has also developed positively to the extent that demand has risen again as a result.

Quality Issues in Western and Eastern Growing Regions

Now the quality of the current harvest seems to be reshuffling the cards once again. In the western growing region (Akcakoca), for example, the heat has caused harvest losses of around 10-15% compared to the original estimate, as the kernels are very small. Fortunately, the quality of these batches is okay. However, in the large growing areas of the eastern Black Sea region (Ordu and Samsun), there are major quality problems.

The quality problems that Georgia is already experiencing due to the mass occurrence of the marmorated stink bug are now also affecting Türkiye. Although warnings had been given, insufficient measures were taken. There are now a large number of lots on the market with a high proportion of defective kernels. These lots are rejected by the TMO and will likely be rejected by the market leader as well.

Therefore, these lots are now either sold at a significant discount, which many farmers currently do not want, so they sell the lots to local collectors on a commission basis. The problem is that the quality does not increase as a result of storage, but deteriorates rapidly. This means that these batches will probably keep us busy throughout the season. We are also already thinking about how to get to grips with this problem in the future. There are already requests to international experts, which shows the scale of the challenge.

Challenges with Kernel Peelability

In addition to this fundamental problem, the poor peelability of the kernels stands out again this year. Although this is always low at the beginning of the season, the depositing of the kernels does not result in such an improvement that the values of previous years can be approached. For roasters, this means that waste (especially in the production of fully blanched kernels) is significantly higher. For this reason, we are currently seeing extremely aggressive sellers of hazelnut paste. Due to the poor peelability, demand for kernels of the Giresunder variety is already particularly high. Here, the price on the free market has already risen and is close to the TMO price. As a result, the TMO in the Giresun region is also seeing little demand.

Delays and Future Expectations

The quality issue is also so dominant, as the good lots (e.g., Cakildag variety - from the growing regions > 300 m above sea level) are not yet on the market. The rainy days this week have delayed the drying of the kernels. However, they should be on the market from next week. This should hopefully improve the mood a little, and the export of natural kernels should start. With regard to kernel size distribution in the eastern growing region, especially the proportion of 13-15 mm kernels, no representative statement can yet be made. Currently, the price difference between 11-13 mm and 13-15 mm is above average, but this is also due to the prioritization of the sale of 11-13 mm by the local crackers. It is therefore still too early to make a statement about future developments.

Market Dynamics and Currency Impact

In terms of demand, this week has already been quite eventful. Some larger buyers are in the market, some of whom have already concluded contracts. As a result, commodity prices are also trending slightly upwards again. Overall, export price lists were slightly lower this week than in the previous week, but this is mainly due to the fact that there was still a need for corrections from the previous week. With regard to the exchange rate, it should be noted that the Turkish lira gained almost one percentage point again over the course of the week, although this was mainly due to the EUR exchange rate.

Looking Ahead: Market Leader’s Role and Upcoming Activities

We expect the market leader to resume its purchasing activity in the coming week. This will be a key factor for further developments. We hope that it will do so in the form of a definitive price and not, as in the past, with an “offer me what you have” call. There are also ongoing tenders from Europe, so we assume that the following week will be a very active one. The market continues to be characterized by the heterogeneity of the price lists. While the spread for natural kernels is decreasing, we are seeing an increase in the spread for processed goods. The leaders in the spread are fully blanched kernels and hazelnut paste. It is worth comparing.

Key Factors Influencing Bullish and Bearish Market Trends

Key points

• Good demand, delays in drying due to rain and quality parameters are leading to slightly rising raw material prices.
• Purchasing activity by the market leader is expected from the coming week.
• Expectation of a two-tier market development. On the one hand, expensive natural and fully blanched kernels of good quality and inexpensive small-scale processed goods.
• The exporters' price lists continue to be very heterogeneous, with a certain degree of harmonization taking place for natural kernels, while the gap continues to widen for processed goods.
• Sellers are currently very active, especially in the sale of hazelnut paste.
• The Turkish lira is trending slightly stronger again this week, although this is not having a significant impact on export price lists.